President Biden’s Executive Order on Federal Contractors and the Minimum Wage Increase: Is DP3 or CHAMPS Impacted?
If you move DoD, GSA and DoS shipments, you should pay attention to this topic. IAM is following the President’s Executive Order on the minimum wage increase and its potential impact to DoD TSPs and their “subcontractors.”
Even though the requirement looks as if it’s mandated that the new minimum wage of $15 per hour applies to government “contracts,” we believe it might likely apply to the Government/DoD’s tender/tariff environment as well. We’ve raised the issue to GSA ERRC and USTRANSCOM’s Defense Personal Property Management Office. USTRANSCOM has forwarded the issue to their legal office for review.
We are trying to get a decision on the minimum wage applicability to GSA and DoD moving programs as soon as possible to allow you enough time to appropriately plan.
This change also requires a rulemaking process from the Dept. of Labor, which will begin next month and is scheduled to be finalized by the end of November. That will open a comment period for interested parties; and provide additional detail on implementation.
The intent of the Executive Order is to have all new contracts after Jan. 1, 2022 include the $15 minimum clause, as well as existing contracts being renewed after that time.
FAR is specifically referenced, but again, the Tender environment may also be included – given that the goal of the Administration is to make this as wide ranging and applicable as possible.
Per the below notice (which published in the Federal Register in early May), Pres. Biden has announced a minimum wage increase to $15.00 per hour (effective no later than March 30, 2022) for all federal agencies under federal contracts/procurement.
This includes federal contractors, as well any subcontractors hired as part of the procurement for goods and services. This is applicable to all FAR and SCA agreements (as well as some other procurements).
Applicability details begin at the bottom of page 5 (Sec. 8).